A capitulation by the bearish holdouts could be a boon for YHOO

While the broader S&P 500 Index (SPX) is set to end the month relatively flat, the shares of Yahoo! Inc. (NASDAQ:YHOO - 18.86) are on pace for a 12% gain. In fact, since skimming the $14.60 level in late August, the Internet issue has added roughly 29%, with the most recent leg of its uptrend highlighted by its 10-day moving average. This trendline lifted YHOO to a fresh multi-year high of $19.16 earlier this week, and a pullback to support here could point to an opportune entry point for contrarian bulls.

Despite the stock's impressive advance, Wall Street remains wary. Short interest skyrocketed more than 31% during the past two reporting periods, confirming there's still plenty of sideline cash to fuel additional gains.

Meanwhile, the equity's Schaeffer's put/call volume ratio (SOIR) of 0.78 stands higher than 72% of all other readings of the past year. In other words, short-term options players are more put-heavy than usual right now. In the December series, the 17 and 18 strikes are most popular, with roughly 14,600 and 21,800 open puts, respectively. In the short term, this abundance of bearish bets could translate into options-related support for YHOO.

Finally, just five out of 24 analysts deem the stock worthy of a "buy" or better endorsement. Likewise, the consensus 12-month price target among the brokerage bunch sits at a paltry $19.08 -- less than a point from YHOO's closing price of $18.87 on Thursday. Should more analysts take a cue from Goldman Sachs, a flood of upgrades or a round of price-target hikes could add contrarian fuel to YHOO's fire.

Investors expecting more long-term upside for YHOO should consider buying the stock's in-the-money April 14-strike calls, which were last asked at $5.